Medicare Physician Payment


Currently, Medicare pays physicians for their services by means of the flawed Sustainable Growth Rate (SGR) formula. The SGR produces negative payment rates based on unrelated economic factors, not on the health care needs of Medicare patients or on physicians’ costs of providing care.

For over a decade, Congress regularly has found it necessary to override this dysfunctional formula, a testimony to its inappropriateness.

As family physicians, we understand the negative impact this failed SGR policy has on our practices and the harmful disruption a 21% cut would have on access to care for our Medicare patients. While we worry about the financial security of our practices, our top concern is the reality that such a dramatic decrease in revenue potentially could prevent family physicians from being able to provide care to their Medicare patients.

On March 26, the House passed the Medicare Access and CHIP Reauthorization Act (H.R. 2). The Senate must now act to pass the same legislation that will avoid a 21-percent physician payment cut and will reform the physician payment system to focus on the delivery of primary care. The cost of repeal and reform, which last year was at an all-time low, is now beginning to increase. 

If this fails, Congress will enact the 19th short-term patch and physicians will see three more years of an inequitable payment system that is mired in fee-for-service and minimizes the value of primary care.

Recently, AAFP President Robert L. Wergin, MD, FAAFP spent a week in Washington, DC, meeting with members of the House and Senate to urge Congress to repeal the flawed Medicare Sustainable Growth Rate. View his message. 

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